Cambrian House - Crowdsourcing Gets Real

Posted on April 18, 2007
Filed Under Entrepreneurship |

Up until now a lot of the talk about wisdom of crowds has been theoretical in nature, lot’s of sites like Digg claim the title but in reality a very small percentage of the user base ends up steering the market. Cambrian House is a company that aims to put crowdsourcing to work, literally, but throwing out an open call for new ideas and promotion of concepts, as well as talent sourcing and eventually venture investment.

Crowdsourcing was coined by Jeff Howe of Wired Magazine in 2006 to describe a business model in which a company or institution takes a job traditionally performed by an employee and outsources it to an undefined, generally large group of people in the form of an open call over the internet.

The concept is really quite simple, you register to become part of the community, find other people that you can connect with, share ideas and collaborate, get something started and then tap into the “people”, “ideas”, and “businesses” to get other people or services involved. There’s a bazaar where people, ideas, and businesses are bought and sold (people have services they offer).

I really want to like this service but I find it less than convincing. The concept is compelling but the execution is confusing. Different areas seem overlapping, for example there is an ideas section but their is also a ideas bazaar. In browsing the people, ideas, and businesses areas I am struck by how trivial many of them come off.

This goes to the main weakness, I’m not going to share what I think is a great idea and more to the point, a great idea is nothing without an ability to execute on it. I don’t team up with people just because they have a funny avatar and a few keywords I recognize, I work with people that I believe I can develop relationships and trust with.

I did like browsing the Idea Explorer area as there were a couple of concepts that actually sounded pretty interesting, like the CodeWiki. The Crowdsourced Debt Collection idea could probably work, if it’s legal.

Lastly, CH (as they apparently refer to themselves) has a novel payment mechanism, which I presume is used for inter-network commerce, and a cooperative membership model where every member is a shareholder. Hoooowwwever, in reading the fine print, CH has set aside 1% of their 260,000 total million shares to share with members, so I’m not going to be shopping for a vacation house off my equity.

I also questioned how they are doing this considering that the SEC requires any company with more than 500 shareholders to report as if they were a public company, but the FAQ does detail an important point, the “Cambrian House Coop” is a separate legal entity with 1% of the equity and 1% of the revenue of Cambrian House.

So basically the “everyone is an owner” makes for great marketing but is a lot of bullshit. Members don’t own any equity in Cambrian House, they own shares in Cambrian House Coop that has a 1% equity and revenue cap in Cambrian House. If you are happy sharing 1% with a few thousand people you don’t know, then more power to you. At least they can get to 26 million members before they have to split the stock!

While I have some complaints and concerns about how this is implemented, I very much like the idea. I’ve seen some other initiatives that aim to help companies identify the initiatives that they should be investing in, like Dell’s IdeaStorm. Dell’s initiative is powered by Crispynews, an interesting little company I came across last year while looking for a community powered news site I could implement. I abandoned the Enterprise Crispynews site reluctantly after realizing that the market requires a far larger number of people participating in the market than I could muster (enterprise software not being “mass market”).

Keep in mind that these concepts are not totally new, SAP had a system in place before I joined the company almost a decade ago that gave customers a number of votes that they could apply to customer nominated development projects, if they felt strongly about a specific project they could put all their votes to that one project or spread them around to a portfolio of initiatives that they wanted to see developed, and if other customers cast their votes to the same projects, well they would get built.

Crowdsourcing is a great concept and I hope these initiatives get traction. Maybe it’s my age showing through, but I think I would have gravitated to a system that is cleaner in it’s layout and moves users through a set of pathways, like IdeaStorm. Also, how about highlighting some successes!

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